ENTRY STRATEGIES

Question

Discuss the importance of recognizing and implementing different entry strategies and organizational arrangements which result in shared control and oversight through collaborative relationships, as illustrated in the Chapter 9 opening-discussion case, “Volkswagen’s Comeback: Aligning Strategy and Structure.”  Please post your Discussion based on the following questions:

1) Which organizational structure described in the chapter does Volkswagen’s “customer oriented” structure most closely resemble?

2) How might such a structure help or hinder entry into new markets?

3) Does a matrix or customer-oriented structure

Answer and explanation

1) Which organizational structure described in the chapter does Volkswagen’s “customer oriented” structure most closely resemble? 

Ans. The organizational structure described in this chapter narrowly resembles that Volkswagen’s “customer-oriented” structure is a global product division. “A global product division is a structural arrangement where the domestic divisions are given a worldwide responsibility for product groups.” They operate like profit centers and the products are usually in the product cycle’s growth stage, thus they are required to be marketed and promoted carefully.

2) How might such a structure help or hinder entry into new markets?

Ans. This kind of structure can help entry into new markets by offering most advantages when the requirement for product differentiation or specification in different markets is high, creating divisions which specialize in every product, and that it can ensure that every location responds properly if a product is in a different life cycle.

The ways in which this structure can hinder entry into new markets is its necessity of duplicating facilities and staff personnel in every division, division managers might go through current attractive geographic prospects for their products and neglect other areas with advantages like better long-term potential, and various division managers spend very much time in making an effort to tap the local instead of international market because it is more convenient. For example, if a product is sold globally, many different divisions are responsible for sales.

3) Does a matrix or customer-oriented structure lend itself better to forming joint ventures and alliances?

Ans. A matrix structure lends itself better to form alliances and joint ventures because it will be most advantageous for Volkswagen since it lets the MNC coordinate product lines and geographies by the use of a matrix design. A mixed organizational structure, “a structure which is combination of a global product, area, or functional arrangement, would also help juggle all of its global holdings and allows the organization to develop particular kind of design which best meets its specific needs, but it varies on the basis of joint venture the MNC is in.